In this economy, tracking and analyzing your financial habits has never been more important. The good news is that with the availability of personal computers and specialized programs, it's easier than ever to understand where your money is going.

The foundation for building a spending plan, learning how to budget, reducing expenses and saving money is keeping a financial journal. It also frees you from having to keep up with all of those little transaction receipts that fill your wallet.

Most people are shocked at how much money they blow on inconsequential items. Writing down all of those expenses is often a sobering experience. It can convince the most extravagant shopper to cut back. You'll also want to track the retailers, times and dates of your spending. If you're specific enough, you'll be able to identify when monthly bills are due, where you are spending, your temptations and the places you can save money. Your savings—no matter how little you can put aside—must be a top priority.

Keeping a Ledger

If you're a traditionalist who prefers pen and paper, all you need is a basic notebook or pad. It should cost under $3 to write down your deposits, withdrawals and expenditures. To stay organized, it's helpful to categorize your spending into areas—mortgage, grocery/food, energy, water, car payment, cable, personal grooming, etc.—by assigning dollar amounts to each category. Your goal should be not to exceed the allotted amount budgeted to the specific area. Now that checkbooks are passé, you can use your debit cards to shop then log your expenses manually. Just remember to shred all of those little receipts before tossing them.